Ethics
for the Workers’ Compensation Practitioner

Rules:

From
January 1, 1974 until December 31, 1985, North Carolina lawyers were regulated
by the North Carolina Code of Professional Responsibility. From January 1, 1986
until July 23, 1997, North Carolina lawyers were regulated by the Rules of
Professional Conduct. From July 24, 1997 until February 26, 2003, North Carolina
lawyers were regulated by the Revised Rules of Professional Conduct of the North
Carolina State Bar. On February 27, 2003, the 2003 Revised Rules of Professional
Conduct took effect. Opinions by the North Carolina State Bar adopted under the
Code of Professional Responsibility are denoted “CPR” and opinions adopted
under the Rules of Professional Conduct are noted as “RPC”. Opinions adopted
under the Revised Rules of Professional Conduct of the North Carolina State Bar
and the 2003 Revised Rules of Professional Conduct are denoted as “FEO”. The
editor’s note of the 2003 Revised Rules of Professional Conduct indicates that
the CPR and RPC opinions “still provide guidance on issues of professional
conduct except to the extent that a particular opinion is overruled by a
subsequent opinion or by a provision of the 2003 Revised Rules of Professional
Conduct”. In this manuscript, the 2003 Revised Rules of Professional Conduct
of the North Carolina State Bar will be referred to as “the Rules”. All
rules cited, unless otherwise noted, are rules contained in the 2003 Revised
Rules of Professional Conduct of the North Carolina State Bar. The 2003 Revised
Rules of Professional Conduct as well as CPR opinions, RPC opinions and FEO
opinions are contained in the North Carolina State Bar2003 Lawyer’s
Handbook. This publication is updated yearly. The Rules and FEO opinions are
updated quarterly in The North Carolina State Bar Journal.

I.Purpose
of the Rules

The preamble
of the Rules establishes that a lawyer has a responsibility to represent
clients, to be an officer of the legal system and to be a public citizen having
a special responsibility for the quality of justice. It indicates that a lawyer
should be competent, prompt and diligent and should keep in confidence
information relating to representation of a client. Section 0.1(4) indicates
that a lawyer’s conduct must conform to the requirements of the law both in
professional service to clients and in the lawyer’s business and personal
affairs and that a lawyer’s use of the law only be for legitimate purposes and
not to harass or intimidate others. A lawyer’s conduct shall always
demonstrate respect for the legal system and for those who serve it including
judges, other lawyers and public officials. Finally, the lawyer is encouraged,
through charity and public service, to assure the availability of legal services
to all and to use his education and experience to improve society. “The rules
recognize that virtually all difficult ethical problems arise from conflict
between a lawyer’s responsibilities to clients, to the legal system and to the
lawyer’s own interest in remaining an upright person while earning a
satisfactory living”. Section 0.1(12). The preamble cautions that “the rules
do not, however, exhaust the moral and ethical considerations that should inform
a lawyer, for no worthwhile human activity can be completely defined by legal
rules. The rules simply provide a frame work for the ethical practice of law.”

II.Hot
Topics

A.Communicating
With a Represented Person Through an Agent

This
inquiry was originally submitted to the Ethics Committee in 2001. Since that
time, four proposed responses to the inquiry have been published for comment
under the designation Proposed 2001 FEO 13. Because of the delay in publication,
the opinion which was formally adopted in the Fall 2003 North Carolina State
Bar Journal has been renumbered as a 2003 Ethics Opinion (2003 FEO 4) to
reflect that citations in the Opinion are to the 2003 Revised Rules of
Professional Conduct.

The
Committee has taken up this inquiry eight times since the inquiry was referred
to subcommittee in April 2001. The opinions have vacillated between whether the
defense attorney can or cannot offer evidence gained during a private
investigator’s communication with a represented injured worker.

April 25, 2001

Committee referred inquiry to subcommittee

July 25, 2001

Opinion proposed and published for comment (cannot offer)

October 13, 2001

Opinion revised (cannot offer)

April 17, 2002

Opinion revised (second revision) (can offer)

July 17, 2002

Opinion revised (third revision) (cannot offer)

October 16, 2002

Committee held opinion over for further consideration

January 2003

Opinion revised (fourth revision) (can offer)

April 18, 2003

Opinion revised (fifth revision) (can offer)

July 25, 2003

Bar counsel adopted 2003 FEO 4 (can offer).

Inquiry
#1: Attorney represents the employer and the workers’ compensation carrier in
a workers’ compensation case filed by plaintiff, an injured employee. Attorney
knows that plaintiff is represented by legal counsel. Attorney hired a private
investigator to watch plaintiff to see if plaintiff engaged in any physical
activity indicating that he is not injured to the extent that he claims.
Attorney instructed the private investigator not to engage plaintiff in
conversation. During the surveillance, the investigator ignored attorney’s
instructions and engaged plaintiff in conversation about a motel property
located next to plaintiff’s property. As a pretext for the communication, the
investigator told plaintiff he was interested in purchasing the motel property.
During the conversation, plaintiff stated that he was repairing the motel
property from storm damage. The investigator’s observations of plaintiff
during the remainder of the surveillance, without further verbal contact with
plaintiff, indicate that plaintiff is physically able to work.

Opinion
#1: Rule 4.2(a) of the Rules prohibits the lawyer from communicating about the
subject of the representation with a person the lawyer knows to be represented
by another lawyer in the matter unless the other lawyer consents or the
communication is authorized by law. A lawyer may not do through an agent that
which the lawyer is prohibited by the Rules from doing himself. Rule 5.3. The
Ethics Committee declines to opine on the admissibility of evidence. However, to
discourage unauthorized communication by an agent of a lawyer and to protect the
client-lawyer relationship, the lawyer may not proffer the evidence of the
communication with the represented person, even if the lawyer made a reasonable
effort to prevent the contact, unless the lawyer makes full disclosure of the
source of the information to opposing counsel and to the Court prior to the
proffer of evidence. See Rule 3.3, Rule 4.1.

Inquiry
#2: If the information gained from the investigator’s conversation with
plaintiff may not be used at trial, may attorney still offer the evidence gained
through the investigator’s visual observations of plaintiff?

Opinion
#2: Yes. Visual observation is not a direct contact or communication with a
represented person and does not violate Rule 4.2(a).

It
is important to note that this opinion does not rule that the information gained
by the investigator while speaking to the plaintiff is admissible, merely that
it is not unethical for defense counsel to proffer the evidence. Defense counsel
may only ethically proffer this evidence if he or she makes full disclosure of
the source of the information to opposing counsel and to the Court prior to the
proffer of the evidence.

Upon
defense counsel’s disclosure of the source of the information to opposing
counsel and the Court, it appears that the Court (or in this case the
Commission) is free to determine that such evidence is inadmissible due to the
method by which it was obtained.

It is disturbing that the opinion does not specifically state that the
attorney is under an obligation to instruct the private investigator not to
engage the plaintiff in conversation. In practical terms, I believe that it is a
cause for concern that this opinion, rather than discouraging this type of
contact will actually promote it.

Query:
In addition to the issue of contacting directly and without permission a
plaintiff who is represented, this ethics inquiry raises questions regarding the
dishonest and perhaps fraudulent behavior of the investigator. How does the
workers’ compensation fraud statute N.C.G.S. §97-88.2 impact on the
investigator’s actions as well as the actions of the employer, carrier and
defense attorney? N.C.G.S. §97-88.2(a) provides that any person who willfully
makes a false statement or representation of material fact for the purpose of
obtaining or denying any benefit or payment, or assisting another to obtain or
deny any benefit or payment under this Article, shall be guilty of a Class 1
misdemeanor if the amount at issue is less than $1,000.00. Violation of this
section is a Class H felony if the amount at issue is $1,000.00 or more.

It
should be noted that compliance with the ethics rules does not necessarily
protect a person from penalties be they civil or criminal.

B.Ex Parte
Communication with Medical Providers

In a workers’
compensation case, a physician may not engage in ex-parte communications with
the defendant. Salaam v. N.C. Department of Transportation, 122 N.C. 83,
468 S.E.2d 536 (1996), disc. rev. improvidently allowed, 345 N.C. 494,
480 S.E.2d 51 (1997) (citing Crist v. Moffatt, 326 N.C. 326, 389 S.E.2d
41 (1990). Salaam applied the holding in Crist v. Moffatt to
adversarial proceedings before the Industrial Commission and recognized the
public policy interest in protecting patient privacy in light of the adequacy of
formal discovery procedures. A physician who engages in ex-parte communications
with the defendant also violates the ethical standards of the medical profession
which provide that a physician should not reveal confidential communications or
information without the express consent of the patient, unless required to do so
by law. Salaam does not, as a matter of law, prohibit communication
between rehabilitation professionals and plaintiff’s nonparty treating
physician. However, if the rehabilitation professional is the agent of the
defendant rather than a neutral and unbiased professional, Salaam will
apply. Jenkins v. Public Service Co. of N.C., 134 N.C. App. 405, 518
S.E.2d 6 (1999), reversed on other grounds, 351 N.C. 341, 524 S.E.2d 805
(2000).

RPC
224, an ethics opinion rendered on October 24, 1997 shortly after the Salaam
decision, prohibits an employer’s lawyer from engaging in direct
communications with the treating physician for an employee with a workers’
compensation claim. The opinion indicates that an attorney for an employer may
not contact the employee’s treating physician to discuss the employee’s
medical treatment privately without the consent of the employee or the
employee’s attorney. The opinion merely refers to the Salaam decision.

C.Medical Record Requests

1.Subpoenas

North
Carolina Rules of Civil Procedure, Rule 45 was amended effective October 1,
2003. Rule 45(a)(2) provides that “a command to produce evidence may be joined
with a command to appear at trial or hearing or at a deposition, or any subpoena
may be issued separately”. Rule 45(b)(2) provides that a copy of such a
subpoena also be served upon each party.

The
amendment to Rule 45 now allows a party to subpoena documents without
subpoenaing a witness for deposition. Consequently, although there has been no
action by the Ethics Committee on this topic since the amendment, the effects of
99 FEO 2 and RPC 236 now appear to be significantly limited. 99 FEO 2 rules that
a defense lawyer may suggest that the records custodian of plaintiff’s medical
records deliver the medical records to the lawyer’s office in lieu of an
appearance at a noticed deposition, provided plaintiff’s lawyer consents
thereto. The opinion discusses that RPC 236 holds that it is unethical for a
lawyer to mislead the custodian of documentary evidence as to the lawyer’s
authority to require the production of documents. A lawyer may obtain medical
records in the manner described only if there is an agreement between the
lawyers to waive the deposition and allow the medical records custodian to
deliver the medical records directly to the opposing lawyer. Of course, after a
case is called for trial and a physician is subpoenaed as a witness, defense
counsel may accept medical records in the mail from the physician as allowed by
RPC 180 and Rule 45(c) of the North Carolina Rules of Civil Procedure. It now
appears that a lawyer may subpoena the records from the doctor without prior
consent, but notice of the subpoena must be served on all parties.

In
workers’ compensation cases the employer, carrier or their attorney frequently
writes the plaintiff’s treating physician in denied claims seeking medical
records without a release. In many of these letters N.C.G.S. §97-27 is invoked
to support these attempts. This is a misstatement of the law, and while there is
no ethics opinion specifically addressing this issue, RPC 236 clearly indicates
that it is unethical for a lawyer to mislead the custodian of documentary
evidence as to the lawyer’s authority to require production of documents.

D.Revised
Rules Concerning Attorney’s Fees

1.Contingency Fees

Under
Rule 1.5(c) as revised in 2003, contingent fee agreements must be signed by the
client, must include an explanation of the method used to calculate the fee,
must discuss client expense liability, and the agreement must be confirmed in
writing. Rule 1.5(c) provides that a fee may be contingent on the outcome of the
matter for which the service is rendered, except in a matter in which a
contingent fee is prohibited by Paragraph (d) or other law. A contingent fee
agreement shall be in a writing signed by the client and shall state the method
by which the fee is to be determined, including the percentage or percentages
that shall accrue to the lawyer in the event of settlement, trial or appeal;
litigation and other expenses to be deducted from the recovery; and whether such
expenses are to be deducted before or after the contingent fee is calculated.
The agreement must clearly notify the client of any expenses for which the
client will be liable whether or not the client is the prevailing party. Upon
conclusion of a contingent fee matter, the lawyer shall provide the client with
a written statement stating the outcome of the matter and, if there is a
recovery, showing the remittance to the client and the method of its
determination.

2.Fee Splitting

Under
Rule 1.5(e) as revised in 2003, clients must agree to a fee splitting
arrangement between lawyers in separate firms, including the amount each firm
will receive, and the agreement must be confirmed in writing. Fee splitting is
only allowed between lawyers who are not in the same firm if the division is in
proportion to the services performed by each lawyer or each lawyer assumes joint
responsibility for the representation, the client agrees to the arrangement
including the share each lawyer will receive, the agreement is confirmed in
writing and the total fee is reasonable.

3.Disbursements to Medical Providers in Absence of a Medical Lien

2001
FEO 11 rules that when a client authorizes a lawyer to assure a medical provider
that it would be paid upon the settlement of a personal injury claim, the lawyer
may subsequently withhold settlement proceeds from the client and maintain the
funds in her trust account although there is no medical lien against the funds,
until a dispute between the client and the medical provider over the
disbursement of the funds is resolved. Rule 1.15 generally requires a lawyer to
disburse settlement proceeds in accordance with the client’s instructions
unless the medical provider has managed to perfect a valid physician’s lien.
In such a situation, the lawyer is relieved of any obligation to pay the funds
to his or her client and may pay the physician directly if the claim is
liquidated, or retain in his or her trust account any amounts in dispute pending
resolution of the controversy. Several ethics opinions hold that settlement
funds belong to the client who has the right to determine how to disburse the
funds unless there is a valid lien against the funds. However, if a client
instructs an attorney to pay the proceeds to the client rather than the medical
providers, the lawyer may ignore this instruction if there is a valid lien
against the proceeds or other valid legal assignment of the rights in the
proceeds. Revised 2000 FEO 4. The attorney must determine whether the
assignments given by the client to the medical providers are valid and whether
they create liens against the proceeds. This opinion clarifies when a lawyer may
withhold settlement funds from a client when in the absence of a valid medical
lien or assignment, a client instructs a lawyer to disregard a “letter of
protection” or some other specific representation to a medical provider that
it would be compensated, in whole or in part from settlement proceeds. The
opinion holds that when a lawyer makes a representation to a third party with
the knowledge and authorization of a client, the representation should be
honored. If between the time that a medical provider is told that it would be
paid and the time the settlement or judgment proceeds are received a dispute
arises between the client and the medical provider over the medical bill, in the
absence of a liquidated medical lien against the funds, the lawyer may not
unilaterally decide whether the funds rightly belong to the medical provider or
the client. In that case, the lawyer may hold the portion of the proceeds
allegedly owed to the medical provider in her trust account until the impasse
between the parties is resolved by order of the court or by interpleading the
funds to the court. To ensure that medical providers are not mislead, any
“letter of protection” or other assuredness of payment given to a medical
provider must explain that the lawyer will hold disputed settlement funds in the
trust account in the event that the client subsequently instructs the lawyer not
to pay the medical provider.

III.Recent
Formal Ethics Opinions

A.Responding
To Opposing Counsel’s Mental Health Problem 2003 FEO 2

This
opinion was adopted by the State Bar Council on October 24, 2003 and rules that
a lawyer must report to the North Carolina State Bar a violation of the Rules of
Professional Conduct as required by Rule 8.3(a) even if the lawyer’s unethical
conduct stems from mental impairment (including substance abuse). In this
instance Attorney A and Attorney B represent opposing parties in a legal matter.
Attorney A’s behavior has led Attorney B to suspect Attorney A has a serious
mental health problem (or possible substance abuse problem) that may be
interfering with the representation of Attorney A’s client.

First, this
opinion rules that Attorney B may not communicate with Attorney A’s client as
Rule 4.2(a) prohibits communication about the representation with a person a
lawyer knows is represented by another lawyer.

Although
a lawyer must competently and diligently represent her clients, she does not
have a duty to press every advantage particularly when such conduct is
inconsiderate or repugnant. Rule 1.2(a)(2) provides that a lawyer does not
violate the duty to abide by the client’s decisions relative to the objectives
of the representation by avoiding offensive tactics or treating with courtesy
and consideration all persons involved in the legal process. To resolve this
conflict a lawyer may make a confidential report to the Lawyer Assistance
Program (LAP) of the State Bar and/or seek the Court’s oversight when
appropriate.

Attorney
B is not required to report her observations about Attorney A’s mental health
to the State Bar unless she has knowledge of an actual violation of the Rules of
Professional Conduct. Rule 8.3(a) requires a lawyer who knows that another
lawyer has committed a violation that raises a substantial question as to that
lawyer’s honesty, trustworthiness or fitness as a lawyer in other respects to
inform the North Carolina State Bar or the Court having jurisdiction over the
matter. Rule 0.1 underscores a lawyer’s obligation to the legal system and
would encourage the lawyer to communicate the situation of a distressed lawyer
to LAP. Attorney B may report to an approved lawyer assistance program without
regard to whether she has knowledge of a violation of the Rules by Attorney A.

If
Attorney A’s representation of his client is clearly incompetent and a
violation Rule 1.1, Attorney B must report Attorney A to the State Bar or Court
having jurisdiction, if the violation raises a substantial question about the
lawyer’s fitness to practice law. If a violation of the Rules has occurred,
Attorney B must report to the State Bar. A mere reporting of Attorney A to LAP
in this situation does not satisfy the reporting requirement.

Finally,
conduct that is disclosed in a LAP support group which would otherwise be
reportable to the State Bar is confidential and is not reportable to the State
Bar under Rule 8.3. 2001 FEO 5.

Note: The
Ethics Committee meets in January 2004. The following three proposed formal
Ethics Opinions may at that time be revised or adopted. At the time of the
writing of this paper, the opinions were merely proposed.

Attorney
X worked for ABC Law Firm when she began the representation of a client in a
workers’ compensation claim. Prior to the resolution of the claim, Attorney X
left the firm to join another firm. The client chose to continue to be
represented by Attorney X. The Industrial Commission issued an Order releasing
ABC Law Firm from further representation and acknowledging its entitlement to a
portion of any legal fee ultimately awarded in the case. Client’s workers’
compensation case was settled and an Order by the Industrial Commission approved
the settlement and the total attorney’s fee to be paid from the settlement.
The settlement proceeds have not yet been delivered to Attorney X for
disbursement but separate checks for the client’s settlement proceeds and the
approved legal fee will be sent to Attorney X.

Attorney
X is required to notify ABC Law Firm that the Commission has awarded a legal fee
in the case and the amount of that fee. Rule 8.4(c)(d) requires lawyers to deal
honestly with each other and to comply with the law and court orders. When the
check for the legal fee is received by Attorney X, it should be deposited into
her trust account pursuant to Rule 1.15-2(g) requiring that when funds belonging
to the lawyer are received in combination with funds belonging to the client or
other persons, all the funds shall be deposited intact. Client’s consent does
not need to be obtained prior to disbursing the legal fees in the trust account
if the Industrial Commission has already approved the total amount of legal fees
and client has no liability to ABC Law Firm for the fee. The dispute is between
ABC Law Firm and Attorney X. If client is liable to ABC Law Firm for litigation
expenses or to a provider for medical expenses, Attorney X should advise client
of these expenses and may withhold the funds to pay medical liens as provided in
2001 FEO 11. (This opinion is discussed elsewhere in this paper).

Attorney
X may determine the amount of her share of the legal fee and disburse that
amount to herself without the specific consent of ABC Law Firm, if Attorney X
acting in good faith determines that her entitlement to a specified portion of
the legal fee is undisputed. Disputed portions of the legal fee must remain on
deposit in the trust account until the dispute with ABC Law Firm is resolved.

C.Proposed
2003 FEO 13 – Filing Suit After The Statute Of Limitations Has Run

This
proposed opinion holds that an attorney may file a time-barred claim on behalf
of a client whether or not the defendant is unavailable and can only be served
by publication. Such a suit is not frivolous as the expiration of the statute of
limitations does not affect the validity of the claim and does not devest the
court from having jurisdiction. Instead the statute of limitations is merely an
affirmative defense to an otherwise enforceable claim and must be pled by the
defendant in its answer or it is waived.

This
proposed opinion holds that an attorney may only provide a judge with additional
authority post-hearing if the communication is permitted by the rules of the
tribunal and a copy of the writing is furnished simultaneously to opposing
counsel. The ethics opinion discusses in detail 98 FEO 13, which is discussed
elsewhere in this paper. The opinion goes on to state that if the local rules
would permit the submission of authority subsequent to arguments in open court,
then it is not unethical to do so. A copy of the writing must be furnished to
opposing counsel simultaneously, however. Allowing the written submission of
additional authority and supporting arguments promotes the interest and informed
decision-making of the tribunal. Requiring the writing to be copied to opposing
counsel gives opposing counsel the opportunity to respond in time and reduces
the likelihood that the ex-parte communication will result in unfair advantage
to one party. Notwithstanding the above, the attorney making the ex-parte
submission post-hearing should include only that authority which he in good
faith believes is decisive, on point, and not otherwise cumulative in nature.
The Workers’ Compensation Rules of the North Carolina Industrial Commission do
not provide for post-hearing ex-parte communication following the closure of the
record. The Rules of Appellate Procedure provide in Rule 28(g) that additional
authorities discovered by a party after filing his brief may be brought to the
attention of the court by filing a memorandum thereof…and serving copies upon
all other parties. It further notes that the memorandum may not be used as a
reply brief or for additional argument but shall simply state the issue to which
the additional authority applies and provide a full citation of the authority.
Although it is not an official policy of the Industrial Commission, considering
the informal nature of the process and the fact that the record does not close
until after the hearing, such memorandum of additional authorities would
probably be acceptable following closure of the record and would most likely not
be a violation of the ethical rules.

IV.Diligence

“A lawyer shall act with reasonable diligence and promptness in
representing a client”. Rule 1.3. Comment 2 of this section recognizes that a
client’s interest may often be adversely affected by the passage of time or
the change of conditions and that the adverse effects may range from the
client’s legal position being destroyed to causing the client needless anxiety
and undermining his confidence in the lawyer. Comment 5 further explains a
breach of the duty of diligence and promptness by indicating that “a pattern
of delay, procrastination, carelessness, and forgetfulness regarding client
matters indicates a knowing or reckless disregard for the lawyer’s
professional duty.” The comment goes to pains to note that a pattern of
negligent conduct is not excused by burdensome caseload or inadequate office
procedures. The lawyer’s equivalent to -- the dog ate my homework yet again--
is not acceptable and is a violation of the duty of diligence.

Comment
to Rule 1.3 indicates that conduct sufficient to warrant the imposition of
professional discipline is typically characterized by the element of intent or
scienter manifested when a lawyer knowingly or recklessly disregards his or her
obligations. Breach of the duty of diligence sufficient to warrant professional
discipline occurs when a lawyer consistently fails to carry out the obligations
that the lawyer has assumed for his or her clients. A pattern of delay,
procrastination, carelessness and forgetfulness regarding client matters
indicates a knowing or reckless disregard for the lawyer’s professional duty.
For example, a lawyer who habitually misses filing deadlines and court dates is
not taking his or her professional responsibility seriously. A pattern of
negligent conduct is not excused by a burdensome caseload or inadequate office
procedures.

V.Fees

Note: Plaintiff’s
counsel should refer to the previous discussion of amended Rule 1.5(c) and all
counsel should refer to Rule 1.5(e) regarding fee splitting.

Rule 1.5
provides that a lawyer “shall not enter into an agreement for, charge, or
collect an illegal or clearly excessive fee”. The issue arises frequently at
the Industrial Commission in fee requests in uncontested death cases. The rule
provides some general guidance in the area of whether or not a fee is excessive.
A fee is clearly excessive when “after a review of the facts, a lawyer of
ordinary prudence experienced in the area of law involved would be left with a
definite and firm conviction that a fee is clearly excessive.” Since that
criteria is sufficiently mushy as to change with each and every lawyer of
“ordinary prudence”, the rule lists several factors to be considered in
determining whether a fee is excessive: 1) the time and labor required, the
novelty and difficulty of the questions involved and the skill requisite to
perform the legal service properly; 2) the likelihood that the acceptance of the
particular employment will preclude other employment by the lawyer; 3) the fee
customarily charged in the locality for similar legal services; 4) the amount
involved and the results obtained; 5) the time limitations imposed by the client
or the circumstances; 6) the nature and length of the professional relationship
with the client; 7) the experience, reputation and ability of the lawyer; and 8)
whether the fee is fixed or contingent. It is also to be noted that Rule 1.5(f)
requires that any lawyer having a dispute with a client over a fee for legal
services must make reasonable efforts to advise the client of the existence of
the North Carolina State Bar’s program of fee dispute resolution at least 30
days prior to initiating legal proceedings to collect the disputed fee, even if
the fee is not disputed but plaintiff has merely failed to pay, and to
participate in good faith in the fee dispute resolution process, if the client
submits a proper request for fee arbitration.

RPC
35 touches on the issue of whether a contingency may be charged for collection
of medical fees in a non-workers’ compensation context. RPC 35 deals with the
issue of whether or not a lawyer may enter into a contingency fee to collect
medical expenses under the provisions of a liability insurance contract which
provides for the payment of the insured’s medical expenses up to a certain
amount without regard to fault if there is no dispute as to the validity of the
medical bill. The analysis in this case is that there is generally no
justification for high fees where there is no risk of nonpayment. Therefore, in
order for a contingency to be reasonable, and therefore permissible, there must
exist at the time the agreement is made some real uncertainty as to whether
there will be a recovery. The opinion goes on to state that it is not unethical
for the attorney to make some reasonable charge for services rendered in regard
to the collection of such claims.

RPC
174 in a related opinion rules that a legal fee for the collection of med-pay
which is based upon the amount collected is unreasonable. Unless there exists a
significant risk that a med-pay claim will not be paid, it is unreasonable for a
lawyer to charge a fee for collecting med-pay which is not related to the cost
to the lawyer of providing this service. A fee structure which is a sliding fee
based upon the amount of the claim and not upon the cost to the lawyer to
provide this service is unreasonable and a violation of Rule 2.6(a). RPC 174
also references RPC 35.

RPC
190 rules that a lawyer who has agreed to bill a client on the basis of hours
expended does not fulfill his or her ethical duties if he or she bills the
client for more time than was actually expended on the client’s behalf. Thus,
a lawyer who has agreed to bill a client on the basis of hours expended may not
bill the client on the same basis for reused work product. In this inquiry the
question was whether research originally prepared for another client could be
reused and the current client billed for the research.

The
comment to Rule 2.6 of the Rules regulating legal fees indicates “once a fee
contract has been reached between attorney and client, the attorney has an
ethical obligation to fulfill the contract and represent the client’s best
interest regardless of whether he has struck an unfavorable bargain. A lawyer
also has a duty to deal honestly with clients pursuant to Rule 1.2(c). The
comment indicates that implicit in an agreement with a client to bill at an
hourly rate for hours expended on the client’s behalf is the understanding
that for each hour of work billed, an hour’s worth of work was actually
performed. If a lawyer uses reused work product, the lawyer would be engaging in
dishonest conduct. The opinion does allow the lawyer to bill at an hourly rate
for the time expended in tailoring the old work product to the needs of the new
client. It is not unethical to charge for the value of reused work product if
the original agreement or any subsequent fee agreement includes the express
understanding that the client will be charged a reasonable fee which is not
based upon hourly compensation.

RPC
196 rules that a law firm may not charge a clearly excessive fee for legal
representation even if the legal fee may be recovered from an opposing party. If
a law firm collects more than a fee that has been determined to be reasonable
after taking into account the factors set forth in Rule 2.6(b) as discussed
above, a law firm would be charging and collecting an unethical and excessive
fee whether the fee is collected from the client or an opposing party. In
addition, if the law firm inflates its fee in a request to a court for the
recovery of legal fees, the law firm would be engaging in misrepresentation of
the actual fees incurred for that particular action and would be in violation of
Rule 1.2(c) which prohibits a lawyer from engaging in conduct involving
dishonesty, deceit or misrepresentation.

Collection
of legal fees in a workers’ compensation case must go through an additional
hurdle beyond the ethical constraints applied by Rule 1.5. No fee may be
collected by a lawyer in a workers’ compensation case unless that fee has been
approved by the North Carolina Industrial Commission. N.C.G.S §97-90.

RPC
141 indicates that an attorney’s contingent fee in a case resolved by a
structured settlement should, if to be paid in a lump sum, be calculated in
terms of the settlement’s present value. The ethics committee went to great
lengths to indicate that the prohibition on collecting an illegal or clearly
excessive fee requires an examination of all relevant facts and circumstances
relating to the fee and the legal services. The committee goes on to state that
it has generally refrained from adopting per se rules prohibiting certain types
of agreements or methods of computation. However, where an attorney is entitled
to receive a contingency fee calculated as a percentage of any amount recovered
and arrangements are made for the payment of sums over a prolonged period of
time in the form of a structured settlement, the attorney may collect
immediately only the prescribed percentage of the total settlement reduced to
its present value.

VI.Representation

A.Incompetent Client

Rule 1.14 addresses the problem presented when a client’s ability to
make an adequately considered decision in connection with the representation is
impaired whether because of minority, mental disability or for some other
reason. The rule instructs a lawyer as far as reasonably possible to maintain a
normal client-lawyer relationship with the client under these circumstances.
However, it provides that a lawyer may seek the appointment of a guardian or
take other protective action with respect to the client when the lawyer
reasonably believes that the client cannot adequately act in the client’s own
interest.

The comments to Rule 1.14 recognize that a client may have intermediate
degrees of competence and that while a guardian or other representative may be
necessary for the legal representation of a client, the lawyer maintains the
responsibility to communicate with the person under the disability as much as
possible. RPC 157 provides that an attorney may seek the appointment of a
guardian over a client’s objection if it appears to be reasonably necessary to
protect the client’s interest, i.e., the client is in the attorney’s
opinion, not competent to handle his affairs in relation to the representation
and the client’s actions in regard to the matters involved in the
representation are detrimental to the client’s own interest. However, in
establishing the grounds for guardianship, the attorney may disclose only his or
her belief that there exists a good faith basis for the relief requested and may
not disclose the confidential information obtained from the client which led her
to conclude that the client is incompetent except as required or permitted by
Rule 4(c).

RPC 109 provides that a lawyer may not represent parents as guardians ad
litem for their injured child and represent parents as individuals concerning
their related tort claim after having received a joint settlement offer which is
insufficient to fully satisfy all claims. The opinion indicates that the
attorney may not represent conflicting interests which can not be reconciled
under Rule 5.1 and that the parents have a conflict of interest between their
personal claims and the claims of the child for whom they are fiduciaries. RPC
123 addresses the same issue in a broader way but does not contradict the advice
given in response to RPC 109. This opinion indicates that a lawyer may represent
parents and an independent guardian ad litem for their child in related tort
claims under certain circumstances. In this case involving the alleged
malpractice of a physician and the child’s claim for negligence as well as the
parents claim for negligent infliction of emotional distress, the opinion
indicates that an attorney may represent the parents and the child in
negotiating with the physician or his insurer prior to the initiation of
litigation and possibly to the point of establishing negligence. However, upon
the receipt of settlement offers potential problems of conflict of interest
would arise. RPC 251 delves further into this question stating that a lawyer may
represent multiple claimants in a personal injury case, even though the
available insurance proceeds are insufficient to compensate all claimants fully,
provided each claimant or his legal representative gives informed consent to the
representation and the lawyer does not advocate against the interest of any
client in the division of the insurance proceeds.

RPC 163 indicates that an attorney may seek the appointment of an
independent guardian ad litem for a child whose guardian ad litem has an obvious
conflict of interest in fulfilling his fiduciary duties to the child. It further
raises the question whether when the client is laboring under a disability the
lawyer has an affirmative duty to request an independent guardian ad litem.

B.Fraudulent Or Lying Client

A lawyer shall
not represent a client or where representation has commenced, shall withdraw
from the representation of the client if the representation will result in a
violation of law or the Rules, the lawyer reasonably believes that the client is
bringing the legal action, conducting the defense or asserting a position for
the purpose of harassing or maliciously injuring any person, the lawyer’s
physical or mental condition materially impairs the lawyer’s ability to
represent, or the lawyer is discharged. In these situations, Rule 1.16(a)
requires the lawyer to withdraw or refuse to represent the client. Subsection
(b) provides that a lawyer may withdraw from representation if 1) he may do so
without material adverse affect on the client, 2) the client knowingly and
freely assents to the termination of the representation, 3) the client persists
in a course of action involving the lawyer’s services that the lawyer
reasonably believes is criminal or fraudulent, 4) the client insists upon
pursuing an objective that the lawyer considers repugnant, imprudent or contrary
to the advice and judgment of the lawyer, 5) the client has used the lawyer’s
services to perpetuate a crime or fraud, 6) the client fails substantially to
fulfill an obligation to the lawyer regarding the lawyer’s services and has
been given reasonable warning that the lawyer will withdraw unless the
obligation is fulfilled, 7) the representation has been rendered unreasonably
difficult by the client, 8) the representation will result in an unreasonable
financial burden to the lawyer, 9) the client insists upon presenting a claim or
defense that is not warranted under existing law and cannot be supported by a
good faith argument for an extension, modification or reversal of existing law,
or 10) for other good cause. Rule 1.16 further requires that when permission for
withdrawal from representation is required by the rules of the tribunal, as in
practice before the Industrial Commission (Workers’ Compensation Rules of the
North Carolina Industrial Commission, Rule 614(3)), a lawyer shall not withdraw
from the representation before that tribunal without the permission of the
tribunal. Finally, upon termination of representation for whatever reason and
under whatever circumstances, a lawyer must take steps to the extent reasonably
practicable to protect the client’s interest including giving reasonable
notice and surrendering papers.

Often the
more serious ethical conflicts are those involving client confidentiality and
the knowledge that a client has or is attempting to commit criminal or
fraudulent behavior using the lawyer’s services. While it is not necessarily a
real solution to the problem, under the Rules, the lawyer must withdraw from
representation of the client if the client insists on that course of conduct or
refuses to allow the lawyer to disclose the information. A lawyer is not
obligated to decline to represent or withdraw simply because the client suggests
such a course of conduct, but must if the client insists on pursuing the
conduct. Comment 3 of Rule 1.16 indicates that if permission for withdrawal is
required by a tribunal and that tribunal requires an explanation for the
withdrawal, the lawyer is bound to keep confidential the facts that would
constitute such an explanation, but the lawyer may state that professional
considerations require termination of the representation. Where an attorney
learns prior to trial that his client intends to commit perjury or participate
in the perpetuation of a fraud upon the court, he must withdraw from the
representation of the client, seeking leave of the court if necessary.

C.Disappearing
Client

RPC 223
gives assistance to the lawyer whose client has disappeared. The opinion rules
that when a lawyer’s reasonable attempts to locate a client are unsuccessful,
the client’s disappearance constitutes a constructive discharge of the lawyer
requiring the lawyer’s withdrawal from representation. The reasoning of this
opinion is that constructive discharge is essentially the same as if a client
affirmatively discharges his lawyer. Therefore, the attorney must withdraw from
representation. It must be noted, however, that upon the withdrawal from
representation because of constructive discharge, the attorney may not file a
complaint on behalf of that client even to stop the running of the statute of
limitation. Once the lawyer is unable to locate the client after reasonable
efforts to do so, the lawyer must withdraw from representation without taking
any further action on behalf of the client.

D.Discharging Client

CPR 300
provides that an attorney, after being discharged by his or her client, cannot
discuss the client’s case with the client’s new attorney without the
client’s consent. This would be a violation of Rule 1.6 which requires that a
lawyer may not reveal information acquired during the professional relationship
with a client unless the client gives informed consent, the disclosure is
impliedly authorized in order to carry out the representation or the disclosure
is specifically permitted by Paragraph (b) of the rule.

VII.Good
Faith

Rule 3.1 provides that a lawyer shall not bring or defend a proceeding
or assert or controvert an issue therein unless there is a basis in law and fact
for doing so that is not frivolous which includes a good faith argument for an
extension, modification or reversal of existing law. It should be noted that the
language in this rule is very similar to Rule 11 of the North Carolina Rules of
Civil Procedure. Rule 3.2 requires that a lawyer make reasonable efforts to
expedite litigation consistent with the interest of his client. CPR 321
indicates that it is improper for an attorney to file motions and pleadings for
the mere purpose of delaying the proceedings. Comment 1 of Rule 3.2 notes that
dilatory practices bring the administration of justice into disrepute. Realizing
financial or other benefit from otherwise improper delay in litigation is not a
legitimate interest of the client which may be advanced. Comment 1 also
indicates that it is improper for a lawyer to routinely fail to expedite
litigation for the convenience of advocates even if tolerated by bench and bar.

VIII.Candor

Rule
3.3 states that a lawyer shall not knowingly: “1) make a false statement of
material fact of law to a tribunal or fail to correct a false statement of
material fact or law previously made to the tribunal by the lawyer; 2) fail to
disclose to the tribunal legal authority in the controlling jurisdiction known
to the lawyer to be directly adverse to the position of the client and not
disclosed by opposing counsel; or 3) offer evidence that the lawyer knows to be
false. If a lawyer, the lawyer’s client, or a witness called by the lawyer,
has offered material evidence and the lawyer comes to know of its falsity, the
lawyer shall take reasonable remedial measures, including, if necessary,
disclosure to the tribunal. A lawyer may refuse to offer evidence, other than
the testimony of a defendant in a criminal matter, that the lawyer reasonably
believes is false”. The rule goes on to indicate that this affirmative duty
continues to the conclusion of the proceeding and applies even if compliance
requires disclosure of information otherwise protected by Rule 1.6. Rule 3.3(c).

The
comments under Rule 3.3 note that an assertion purporting to be on a lawyer’s
own knowledge, for example in an affidavit or in a statement in open court, may
only be made when the lawyer knows the assertion is true or believes it to be
true on the basis of a reasonably diligent inquiry. Candor toward the tribunal
also requires a lawyer not to base legal argument on a knowingly false
representation of the law, and fulfillment of the duty to disclose directly
adverse authority in the controlling jurisdiction which has not been disclosed
by the opposing party. While a lawyer is not required to make a disinterested
exposition of the law, he must at least acknowledge directly adverse authority.

When a lawyer knows, not believes, that evidence which is false is going
to be provided by a person who is not his client, the lawyer must refuse to
offer it without regard to her client’s preferences. Rule 3.3(b). When a
lawyer finds out that such information has been given to the tribunal, she must
promptly reveal the fraud to the tribunal. When the false information is offered
by the client, however, the lawyer’s duty of confidentiality to the client and
candor to the court come in to conflict. In this circumstance, the lawyer should
either persuade the client not to offer the information, or if the information
has been offered, to disclose the false character of the information. If the
lawyer questions a client, knowing that the client intends to offer false
information, the lawyer should not question the client on these matters. If the
lawyer is not successful in remonstrating with the client, which is often the
case in the real world, the lawyer should withdraw if that would remedy the
situation. According to Rule 3.3, Comment 10 if a withdrawal will not remedy the
situation or is impossible, the advocate may make disclosure to the Court.
Notice that the word used here is “may” and not “shall”. RPC 203 holds
that the dismissal of an action alone is not sufficient to rectify the perjury
of a client in a deposition, and the lawyer must demand that the client inform
the opposing party of the falsity of the deposition testimony, or if the client
refuses, withdraw from representation. It is reasoned that information contained
in the deposition, which is untruthful, may continue to be relied upon in other
actions. If a lawyer reasonably believes testimony is false, he may refuse to
offer it. If the lawyer only believes that the testimony is false, without
actual knowledge, the refusal is permissive.

99
FEO 16 rules that a lawyer may not participate in the presentation of a consent
judgment to a court if the lawyer knows that the consent judgment is based upon
false information. The attorney must try to persuade the client to remedy the
situation by disclosing the true information. If the client refuses, the
attorney must withdraw from the representation. The attorney should also inform
the client if she presents the consent judgment on her own or through other
counsel, the attorney has the discretion to make disclosure to the court or
opposing counsel if necessary because the client used his services to perpetuate
a fraud on the court. Notice that after the attorney’s withdrawal, the
attorney has discretion to make the disclosure and “may” but not necessarily
“shall” make the disclosure. In particular, in the case of a workers’
compensation claim, presenting forms or pleadings to the Commission or relying
on them when those forms or pleadings indicate that a party has or has not
returned to work or that certain payments have or have not been paid, if that
information is known or should be known to be untrue, may cause a lawyer to run
afoul of Rule 3.3 of the Rules.

IX.Zealousness

Rule
3.4 indicates that a lawyer shall not unlawfully obstruct another party’s
access to evidence or unlawfully alter evidence, falsify evidence or counsel
another to falsify evidence, knowingly disobey or advise a client to disobey a
ruling, make frivolous discovery requests or fail to make reasonably diligent
efforts to comply with proper discovery, etc. While this rule is not always
followed, it is generally known and we are not surprised to hear it evoked.
However, Rule 3.4(e) provides that a lawyer shall not “in trial, allude to any
matter that the lawyer does not reasonably believe is relevant or that will not
be supported by admissible evidence, assert personal knowledge of facts and
issues except when testifying as a witness, ask an irrelevant question that is
intended to degrade a witness, or state a personal opinion as to the justness of
a cause, the credibility of a witness, the culpability of a civil litigant, or
the guilt or innocence of an accused.” Comments 4 and 5 of this section
indicate that “while a lawyer may argue on an analysis of the evidence for any
position or conclusion with respect to any of these matters, a personal opinion
of the lawyer as to the justness of the cause or the credibility of the witness
or the culpability of a civil litigant is prohibited”. This rule is violated
regularly in courtrooms.

X.Respect
for the Court

A.Decorum

Rule 3.5 deals
with impartiality and decorum of the tribunal. Rule 3.5(a)(4) indicates that a
lawyer shall not engage in conduct intended to disrupt a tribunal. This includes
failing to comply with known and local customs of courtesy or practice, engaging
in undignified or discourteous conduct that is degrading to a tribunal or
intentionally or habitually violating any established rule of procedure or
evidence. Comment 9 indicates that an advocate’s function is to present
evidence and argument so that a cause may be decided according to law. An
advocate must refrain from abusive or obstreperous conduct. Even in the case of
abuse by a judge, a lawyer should avoid reciprocation. “The judge’s default
is no justification for similar dereliction by an advocate. An advocate can
present the cause, protect the record for subsequent review, and preserve
professional integrity by patient firmness no less effectively than by
belligerence or theatrics.” In other words, a lawyer must never engage in less
than professional behavior.

B.Ex Parte
Communications

Another
cornerstone of professional responsibility is the principle that a lawyer shall
not seek to influence a judge. Rule 3.5(a)(1). A lawyer shall not communicate ex
parte with a judge except 1) in the course of official proceedings, 2) in
writing, if a copy of the writing is furnished simultaneously to the opposing
party, 3) orally, upon adequate notice to the opposing party or 4) as otherwise
permitted by law. In an adversarial proceeding a lawyer shall not communicate
with a judge relative to a matter pending before, or which is to be brought
before, a tribunal over which the judge presides in circumstances which might
have the effect or give the appearance of granting undue advantage to one party.
Rule 3.5.

RPC
237 rules that a lawyer may not communicate with a judge before whom a
proceeding is pending to request an ex parte order unless opposing counsel is
given adequate notice or unless authorized by the opposing lawyer. A lawyer may
not communicate the merits of a cause with a judge before whom the proceeding is
pending, if the communications will occur outside official proceedings. If
communications are in writing, that communication must promptly be delivered to
opposing counsel or the opposing party. Promptly would generally mean delivery
by the same method and at the same time as that delivered to the judge.

97
FEO 3 rules that a lawyer may engage in an ex parte communication with a judge
regarding a scheduling or administrative matter only if necessitated by the
administration of justice or exigent circumstances and diligent efforts to
notify opposing counsel have failed. In this opinion, it is specifically noted
that the situation must be exigent and diligent efforts to notify opposing
counsel have failed. Waiting until the last minute and failing to notify
opposing counsel means that there has been an ethical violation even if the
matter regards scheduling or administrative matters.

97
FEO 5 rules that a lawyer must give the opposing counsel a copy of a proposedorder simultaneously with the lawyer’s submission of the proposed order
to a judge. This opinion makes specific note that delivery of a document to
opposing counsel five days after its submission to a judge would not be prompt
under the standard and fails to meet the requirement of simultaneous delivery
under Rule 3.5. The opinion notes that “to comply with Rule 3.5, a lawyer must
hand deliver a copy of the written communication to the opposing lawyer at the
same time or prior to the time that the written communication is hand delivered
to the judge, or if the written communication is mailed to the judge, the lawyer
must put the written communication in the mail for delivery to opposing counsel
at the same time or before it is placed in the mail for delivery to the
judge”.

98
FEO 12 sets forth the disclosures a lawyer must make to the judge prior to
engaging in an ex parte communication. In a case where a lawyer seeks an ex
parte communication with a judge to request a continuance and has made several
unsuccessful attempts to notify the opposing counsel, she may request a
continuance in an ex parte communication with the judge provided she fully
informs the judge of the reason for her ex parte communication and gives the
judge an opportunity to determine whether he will hear the matter ex parte. This
rule indicates that those disclosures should include that the lawyer is about to
engage in an ex parte communication, why it is necessary to speak to the judge
ex parte, the authority that permits the ex parte communication and the status
of attempts to notify opposing counsel.

98
FEO 13 deals with written communications with a judge or judicial official and
is based upon an inquiry to the ethics committee regarding communication with a
deputy commissioner in a workers’ compensation case. In this case an attorney
wrote to opposing counsel regarding discovery disputes, medical treatment and
examination of the employee along with other matters. The substance of the
letter implied that opposing counsel had engaged in improper conduct by
communicating with an examining physician and failing to respond to discovery.
This letter was copied to the deputy commissioner scheduled to hear the case.
(The rule specifically indicates that the term judicial official applies to
commissioners and deputy commissioners of the Industrial Commission). This
opinion indicates that Rule 3.5(a)(3) and Rule 8.4(d) must be read together. The
opinion states that “the submission to a tribunal of formal written
communications, such as pleadings and motions, pursuant to the tribunal’s
rules of procedure, does not create the appearance of granting undue advantage
to one party. However, informal ex parte written communications, whether
addressed directly to the judge or copied to the judge as in this inquiry, may
be used as an opportunity to introduce new evidence, to argue the merits of the
case, or to cast the opposing party or counsel in a bad light. To avoid the
appearance of improper influence upon a tribunal, informal written
communications with a judge or other judicial officials should be limited to the
following: 1) written communications, such as a proposed order or legal
memorandum, prepared pursuant to the court’s instructions; 2) written
communications relative to emergencies, changed circumstances, or scheduling
matters that may affect the procedural status of a case such as a request of a
continuance due to the health of a litigant or an attorney; 3) written
communications sent to the tribunal with the consent of the opposing lawyer or
opposing party if unrepresented; and 4) any other communication permitted by law
or the rules or written procedures of the particular tribunal”.

This
rule is particularly important in practice before the Industrial Commission as
the informal nature of the process and the acceptance of letter motions lends
itself to a blurring of the lines with regard to allowable communication.
However, any communication which accuses another party of bad acts, tends to
introduce new evidence or tends to show the opposing party in a negative light
shall not be given to the deputy commissioner or commissioner or should be sent
in a formal motion subject to the applicable rules of service.

2001
FEO 15 rules that a lawyer may not communicated ex parte with a judge in
reliance upon the communication being “permitted by law” unless there is a
statute or case law specifically and clearly authorizing communication or proper
notice is given to the adverse party or counsel.

XI.Conflicts

Multiple
Representation of Claimants for Workers’ Compensation Death Benefits

2001
FEO 6

This opinion examines when a lawyer has a conflict of interest in
representing various family members on claims for a deceased employee’s
workers’ compensation death benefits. The issue of whether or not a spouse who
is separated from the decedent has a conflict of interest with any children of
the decedent was not considered. It was the opinion of the ethics committee that
this was such a clear conflict of interest that the issue need not be addressed.

In Inquiry One a worker was fatally injured in a work-related accident
covered under the Workers’ Compensation Act. At the time of the worker’s
death, he was married to Wife #2 who has two children from a previous marriage
(stepchildren), the worker had two children of his own from his first marriage
(worker’s children), and Wife #2 and worker also had one child together (joint
child). All of the children are under 18 years of age. The opinion rules that
one attorney cannot represent the interest of worker’s children and worker’s
stepchildren as the interests are directly in conflict and such a representation
is prohibited under Rule 1.7(a). The attorney also may not ask the guardian ad
litem for worker’s children to consent to the conflict of interest because it
is so clearly a conflict of interest which may not be resolved.

Inquiry Two asks whether Wife #2 and the worker’s stepchildren and the
joint child of the marriage of Wife #2 and the decedent may be represented by
the same lawyer. A single attorney may represent Wife #2 and her own children
from her first marriage (the stepchildren) or may represent Wife #2 and the
joint child of her marriage to the decedent. Either way it is assumed that Wife
#2 would receive the benefits payable to these children during their minority if
they reside with her, and therefore, that they and Wife #2 have a common
economic interest. However a single attorney may not represent the stepchildren
and the joint child of the marriage. The interests of the stepchildren and the
joint child are opposed because the joint child has an interest in maximizing
the benefits payable by eliminating the claims of the stepchildren on the basis
that they were not substantially dependent on the worker at the time of his
death. Furthermore, once the two stepchildren are emancipated they would receive
compensation directly and that compensation would not be made to the household.

XII.Good
Behavior

A.Respect the Rights of Third Persons

Rule
4.4 provides that the attorney should respect the rights of third persons. The
zealous representation of a client does not mean that a lawyer may use means
that have no substantial purpose other than to embarrass, delay or burden a
third person or use methods of obtaining evidence that violate the legal rights
of such a person. This rule further requires that a lawyer who receives a
writing and knows or reasonably should know that the writing was inadvertently
sent should promptly notify the sender.

RPC
252 rules that a lawyer in receipt of materials that appear on their face to be
subject to the attorney-client privilege or otherwise confidential which were
inadvertently sent to the lawyer by the opposing party or opposing counsel,
should refrain from examining the materials and return them to the sender. In
this case following the failure of initial settlement discussions, the
plaintiff’s attorney filed suit on behalf of the plaintiff. The insurance
company hired an attorney to defend it and the defendant in the lawsuit. The
adjuster for the insurance company erroneously sent the company’s claim file
to the plaintiff’s attorney. This file was sent by certified mail,
return-receipt requested addressed to the plaintiff’s attorney. The cover
letter was also addressed to the plaintiff’s attorney. However, the letter
salutation read “Dear Attorney X”, the attorney hired by the insurance
company. A copy of the letter to the actual defendant from the adjuster was also
enclosed in the file. This letter incorrectly informed the defendant that he
would be defended by the plaintiff’s attorney. In addition to a photo of the
plaintiff’s vehicle, the plaintiff’s medical records and plaintiff’s
attorney’s demand letter, the file included a “claim diary” that the
plaintiff’s attorney read and believes contains prima facia evidence of an
unfair and deceptive trade practice by the insurance company. Plaintiff’s
attorney sent a copy of the file to the adjustor and to the defense counsel.
Defense counsel demands the return of the original file. The opinion held that
plaintiff’s counsel does have a duty to return the file to the insurance
company. The opinion further states that from the cover letter it can be readily
ascertained that the accompanying materials were subject to the attorney-client
privilege or otherwise confidential and were sent to the plaintiff’s attorney
inadvertently. Upon realizing that the materials were not intended for his eyes,
the opinion indicates that plaintiff’s attorney should have refrained from
reviewing the file materials, notified the opposing counsel of their receipt and
followed opposing counsel’s instructions as to the disposition of the
materials. The opinion further held that the receiving attorney could not use
the substance of the materials inadvertently sent to him to the advantage of his
client. The opinion went on to state that a lawyer who is the recipient of an
inadvertent disclosure of written materials by an opposing party or opposing
counsel is required to discontinue reading the materials as soon as the lawyer
realizes that the materials may be subject to the attorney-client privilege of
others or otherwise contain confidential communications involving an attorney
and the materials were not intended for his or her eyes. The opinion held that
the duty was the same whether the file was inadvertently sent by the claims
adjuster or by defense counsel.

B.Professional Courtesy

While
a lawyer shall abide by a client’s decisions concerning the objectives of
representation and shall consult with the client as to the means by which they
are to be pursued, a lawyer does not violate the Rules by acceding to reasonable
requests of opposing counsel that do not prejudice the rights of a client, by
being punctual and fulfilling all professional commitments, by avoiding
offensive tactics or by treating with courtesy and consideration all persons
involved in the legal progress. Rule 1.2(a)(2).

RPC 208 provides that avoiding offensive tactics and treating others with
courtesy includes not taking advantage of the opposing party or the opposing
counsel’s failure to respond to a notice of hearing when there has been no
prior lack of diligence or responsiveness on the part of the opposing counsel.

RPC
212 rules that a lawyer may contact an opposing lawyer who failed to file an
answer on time in order to remind the other lawyer of the error and to give the
other lawyer a last opportunity to file the pleading. Such conduct the opinion
states “is not unethical but rather illustrates the level of professional
courtesy and consideration that should be encouraged among the members of the
Bar”. Rule 1.2 indicates that a lawyer does not violate the duty to represent
a client zealously by avoiding offensive tactics or by treating with courtesy
and consideration all persons involved in the legal process. A lawyer is not
required to pursue objectives or employ means simply because a client may wish
that a lawyer do so. The Rules do not require the client’s consent prior to
notifying the opposing lawyer.

It
is to be noted, however, that if a lawyer comes to know or reasonably should
know that a client expects assistance not permitted by the Rules or other law or
if the lawyer intends to act contrary to the client’s instructions, the lawyer
must consult with the client regarding the limitations on the lawyer’s
conduct. Rule 1.2 Comment 14.

C.Advisor

Rule
2.1 indicates that in representing a client, a lawyer shall exercise
independent, professional judgment and render candid advice. In rendering
advice, a lawyer may refer not only to law but also to other considerations such
as moral, economic, social and political factors that may be relevant to the
client’s situation. Comment 1 of this section indicates that a client is
entitled to straightforward advice expressing the lawyer’s honest assessment.
Legal advice often involves unpleasant facts and alternatives that a client may
be disinclined to confront. In presenting advice, a lawyer endeavors to sustain
the client’s morale and may put advice in an acceptable a form as honesty
permits. However, a lawyer should not be deterred from giving candid advice by
the prospect that the advice will be unpalatable to the client. This rules seems
to clearly indicate that a lawyer has an obligation not merely to tell a client
what he or she wants to hear but to inform the client of the reality of the law,
the potential of success of a claim or defense and the impact of certain
positions on the client’s case as a whole.

XIII.Misconduct

Without
regard to the “mays” or “shalls” of the 2003 Revised Rules of
Professional Responsibility, a lawyer is prohibited from engaging in misconduct.
Rule 8.4 states that it is professional misconduct for a lawyer “to violate or
attempt to violate the rules of professional conduct or knowingly assist or
induce another to do so or to do so through the acts of another; to commit a
criminal act that reflects adversely on the lawyer’s honesty, trustworthiness,
or fitness as a lawyer in other respects; to engage in conduct involving
dishonesty, fraud, deceit or misrepresentation; to engage in conduct that is
prejudicial to the administration of justice; to state or imply an ability to
influence improperly a government agency or official; to knowingly assist a
judge or judicial officer in conduct that is a violation of applicable rules of
judicial conduct or other law; or to intentionally prejudice or damage his or
her client during the course of the professional relationship”.

This paper discusses
ethics for the workers’ compensation practitioner
within the context of practice before the North Carolina
Industrial Commission. The discussion that follows reflects the opinions of the
author only. The author's opinions do not have weight as legal authority or
practice in specific cases before the Industrial Commission and specifically may
not represent the ultimate practice before any Deputy Commissioner of the
Industrial Commission.

This paper is being published only as a reference point for information
and reflects the commitment of the Industrial Commission to the discussion of
the law relative to its quasi-judicial function.